7-35 Cash Budget Consider the budgeted income statement for Carlson Company for June 20X4 in Exhibit 7-13. The cash balance, May 31, 20X4, is $15,000. Sales proceeds are collected as follows: 80% the month of sale, 10% the second month, and 10% the third month. Accounts receivable are $44,000 on May 31, 20X4, consisting of $20,000 from April sales and $24,000 from May sales. Accounts payable on May 31, 20X4, are $145.000. Carlson Company pays 25% of purchases during the month of purchase and the remainder during the following month. All operating expenses requiring cash are paid during the month of recognition, except that insur- ance and property taxes are paid annually in December for the forthcoming year. Prepare a cash budget for June. Confine your analysis to the given data. Ignore income taxes. Exhibit 7-13 Carlson Company Budgeted Income Statement the Month Ended June 30, 20. (in thousands) Sales Inventory, May 31 Purchases Available for sale Inventory, June 30 Cost of goods sold Gross margin Operating expenses Wages Utilities $290 S 50 192 242 202 S 36 Advertising Depreciation Office expenses Insurance and property taxes Operating income S 29
7-35 Cash Budget Consider the budgeted income statement for Carlson Company for June 20X4 in Exhibit 7-13. The cash balance, May 31, 20X4, is $15,000. Sales proceeds are collected as follows: 80% the month of sale, 10% the second month, and 10% the third month. Accounts receivable are $44,000 on May 31, 20X4, consisting of $20,000 from April sales and $24,000 from May sales. Accounts payable on May 31, 20X4, are $145.000. Carlson Company pays 25% of purchases during the month of purchase and the remainder during the following month. All operating expenses requiring cash are paid during the month of recognition, except that insur- ance and property taxes are paid annually in December for the forthcoming year. Prepare a cash budget for June. Confine your analysis to the given data. Ignore income taxes. Exhibit 7-13 Carlson Company Budgeted Income Statement the Month Ended June 30, 20. (in thousands) Sales Inventory, May 31 Purchases Available for sale Inventory, June 30 Cost of goods sold Gross margin Operating expenses Wages Utilities $290 S 50 192 242 202 S 36 Advertising Depreciation Office expenses Insurance and property taxes Operating income S 29
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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7-35 Cash Budget
Consider the budgeted income statement for Carlson Company for June 20X4 in Exhibit 7-13.
The cash balance, May 31, 20X4, is $15,000.
Sales proceeds are collected as follows: 80% the month of sale, 10% the second month, and 10%
the third month.
Accounts receivable are $44,000 on May 31, 20X4, consisting of $20,000 from April sales and
$24,000 from May sales.
Accounts payable on May 31, 20X4, are $145,000.
Carlson Company pays 25% of purchases during the month of purchase and the remainder during
the following month.
All operating expenses requiring cash are paid during the month of recognition, except that insur-
ance and property taxes are paid annually in December for the forthcoming year.
Prepare a cash budget for June. Confine your analysis to the given data. Ignore income taxes.
Exhibit 7-13
Sales
$290
Inventory, May 31
Purchases
Available for sale
Carlson Company
Budgeted Income Statement for
the Month Ended June 30, 20X4
(in thousands)
S 50
192
242
Inventory, June 30
Cost of goods sold
Gross margin
Operating expenses
Wages
Utilities
40
202
$ 88
S 36
5
Advertising
Depreciation
office expenses
Insurance and property taxes
Operating income
10
1
59
S 29
9:59 am
O Type here to search
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24/11/2020
CHAPTER 7
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